Women Grabbing Minority Contracts

Glenn Harston`s steel construction company, once the employer of 125 workers, now has fewer than a dozen. Gross sales, $8 million in 1987, fell to about $1.5 million last year.

And now Harston`s Archway Steel Construction is trying to survive after filing for court protection under federal bankruptcy laws.

``Key people who we had for years, we had to let go,`` said Harston, who also is president of Black Contractors United, an organization of minority building firms.

And the South Side businessman is not alone in his struggles, he said. A lot of his colleagues ``have really bitten the dust.``

A major reason for these troubled times, according to Harston and others familiar with the construction industry and the minority-owned companies trying to stay alive in it, is a law passed by Congress in 1987 that governs set-asides on projects funded with federal money.

The statute for the first time lumped fledgling companies owned by women into the ``disadvantaged`` category that previously had been reserved for firms owned by blacks and other minorities.

Companies headed by women now account for a growing portion of the 10 percent in federally mandated set-asides.

``My large competition now is white female-owned firms,`` commented Harston, who said he previously enjoyed set-aside business as the only black steel construction company in Cook County.

Figures on road projects overseen by the Illinois Department of Transportation (IDOT) illustrate the problems faced by minorities, according to the September issue of the Chicago Reporter, a monthly published by the Community Renewal Society.

Minority companies, which received $72 million in state highway contracts in 1986, saw the total plunge to less than $44 million in 1988. For those owned by blacks, the percentage decline was even sharper, from $40 million to $21 million.

Meanwhile, companies owned by women saw their contract awards jump to $43 million from $17 million. Most of the female-owned firms are white, the Reporter said.

``It`s not surprising at all,`` declared Ralph Thomas, executive director of the Washington-based National Association of Minority Contractors. ``It just confirms what we said all along, that lumping women in with minorities would hurt minority contractors. . . . The same thing is going on

nationally.``

White-owned general contractors prefer doing business with white-owned subcontractors to meet set-aside requirements on government projects, Thomas said.

It`s a matter of prejudice, of cultural preference and, in some cases, of people simply doing business with people they know, he said.

``Because of the racial polarity in this country, majority contractors don`t know blacks and other minorities as well as they know their own people,`` he said.

Compounding the problem-and despite preventive efforts by public agencies that award construction contracts-is the existence of companies purportedly owned by women that really are controlled by men, according to minority construction industry leaders.

IDOT has a statewide program to help disadvantaged businesses compete, holding workshops where participants are taught how to do such things as create marketing plans, estimate jobs and how to bid, said Randy Vereen, director of finance and administration for the agency.

But one thing that state officials have no control over is federal law, and that includes the inclusion of women into a category that once was the sole province of minorities, he said.

It`s not surprising that minority firms get less of the set-aside total now when the size of the pie hasn`t been increased and there are more at the table than there used to be, Vereen said.

``I think the practical matter is that you have two types of firms competing now for an amount of money that was available to only one group before.``

Not everyone decries the rise of females at the expense of minorities, nor is there universal agreement that set-asides are desirable in the first place.

``We don`t support any sort of special preference program, whether by race, sex, location or size of company,`` said Bill Henry, a spokesman for the Associated General Contractors, a large industry association headquartered in Washington. ``We feel that the nature of construction is that every firm, no matter how small or new, can find its niche in the market. You have to be able to start small and work your way up.``

Thomas said his group plans to seek a change in the law, reinstating the minority-only set-aside or creating a separate set-aside for female-owned companies.